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I’ve successfully raised about 300K for Texting Base. You’ll hear a lot of advice about beating down doors and that’s true. There are a lot of “noes” (yes, this is the actual plural of “no”) but you can reduce your chances of rejection if you can just get that first meeting. Here are 10 tips!
Know your investor market. Angels come in earlier than VCs will. VCs generally won’t sniff you unless you are in their vicinity or over 400K/year in revenue. Are you going after friends and family? Have you done your deck? Do you have your pro forma finished? Do you even know what a deck or a pro forma is? Have your shit together or even an inexperienced investor will eat you alive and make you feel stupid.
Communicate constantly. My emails to potential investors could be a book. I write one long summary email every month laying out challenges, milestones, what we are doing and why. People don’t invest in something they don’t know…make them know you (whether they want to or not!)
YOU MUST BE HONEST. If you’re bullshitting, you will get found out and that will be it. No one invests in someone who grapples with the truth.
Self-promote. This may be the least comfortable part for most CEOs because it involves time and public speaking. You must do interviews, blogs, books, videos and guest panels…anything for credibility. Investors want to invest in an EXPERT and perception is reality. You need to make yourself appear to be the expert and you need to make the time for this to happen. Credibility is everything.
Name drop to secure meetings. Once you get your first meeting, it’s time to capitalize on the momentum. Email every investor in that area and tell them: “Here is my deck. I can clear any time except (insert when your other meeting is) because I am meeting with (insert firm).” The VC world is just like the dating world and the animal kingdom in general…they want what others want. If someone else wants to meet you, then THEY want to beat that person! Play the game…and it is a high stakes game.
Play the game and negotiate. This is NOT to be confused with bullshitting…you must be honest but you also need to know how to position your offering to take fear away. Don’t be desperate even if you feel that way. You have something of value, act like it!
When it comes to securing money, sometimes you need to get that first investor to put money in so the other potential investors will feel more comfortable. There is strength and security in numbers. You NEVER lie. However, you can make your offer sound much safer by letting investor “A” know where investors “B” and “C” stand.
You are much more likely to secure an investor if that investor thinks others are also excited about what you have to offer. They feel less alone…safer…smarter, and those are good emotions to evoke.
Become local. Remember when I said that investors won’t talk to you unless they think you’re local? I set up a Silicon Valley phone number and will secure a sales office locally for our VC round. The new address will be included in my company updates email. Perception is reality, and if they think I’m one of “them” I am more likely to get in front of the right people.
Never Ask for Money. Always ask for advice. This is 101…everyone should know that but it’s worth adding to the tips.
Be Responsive. The last round of money I raised was from messaging back and forth from 4AM until 7AM. If I had not responded to the 4AM message, my investor would have left for Europe before I could finalize the deal and the deal may never have happened. OK…so this tip may be tough to live up to, but work your ass off and be responsive-people respect it when they see you are on your game.
Be Measured and Thorough in your Answers. The opportunity to answer a question is a blessing. People don’t ask questions unless they have taken an interest in what you are up to. Don’t blow it by sending back a one-sentence message. Be thorough and explain your logic. Don’t write the bible but don’t be curt either…every sentence is judged. Oh…and make sure your grammar and spelling are on point. No one wants to invest in someone who isn’t careful or someone who may be illiterate!
Get their cellular phone numbers. Studies show if you are on a texting basis with someone and text them 3 or more times, your odds of closing them go up 328%. (Leads360 Study).
Be on the ball and send "personal holiday text messages” via text on every major holiday. You’re not selling them…you are building a relationship and trust. Trust is built over time and it takes effort to build that trust. I suggest you use textingbase.com…it’s a phenomenal piece of software. ;-)
ABOUT THE AUTHOR:
Eric Beans is CEO of Texting Base, Inc., out of Orlando, Florida. Texting Base is a marketing automation platform which allows businesses to personalize group text messages.
Prior to Texting Base, Eric was the first US employee of TechSpan which became Headstrong. Headstrong sold for $550M to GenPact.
With a group of partners in 2005, Eric started Premier Mortgage Capital, Inc., a nationwide state charted Mortgage Company that grew to ~ 2B/Year in originations.
Eric is the author of "Changing The World Through Texting Software.”
Eric is a speaker, inventor, investor, and longtime entrepreneur.
Texting Base does not offer legal advice-please consult an attorney before starting to text for business purposes.